When I completed the school of pipsology, Babypips assessed me as a scalper. I went on to look for an idea for a good strategy to use on scalping and I bumped in one on youtube… there was this like a random quick interviews on traders, being asked of what indicators they use on trading. There’s this lady and she answered using two Bollinger bands as her indicator (I can’t remember what the site was or what was her name, sorry). I didn’t put much of an attention to it since I’m quite fond of using MACD, till’ I tried it anyway and find it really useful on 15M lower time frame scalping specially when trades goes into consolidation after a big move.
I’ve been around on forex trading for only just about 8 months now, so I’m still a newbie, still lots to learn. So be easy on me, any wild comments are welcome but much appreciated if you could give feedback on how to improve to this strategy, thanks 
As a noob, maybe even for those veterans once when they were just starting out, problems like where to place the stop loss , target profit, and when to enter a trade, are the things to consider the most. Plus, what kind of reward and risk to use, some uses 2:1 as a standard but later finds out hard to get their TP hit. So, I’m sharing this mainly for those out there that still looking for a simple easy way to get started.
15MDbleBol: (15 minutes chart using two Bollinger Band)
As I have mentioned earlier, the strategy is not entirely mine, this was based on someone’s idea I saw on an interview on youtube. Chances are, at this point of time, probably someone even already had posted the same. Anyways, this is how I use it.
Simple, yet for me I find it effective. For beginners who are likely starting out and looking for a good strategy to work on. But same as with other strategy, without discipline it could lead to loss more than you can get to profit.
Objective:
Scalping, using only two Bollinger bands as indicators with periods 20 and 25, can be used also for swing trades at higher time frame. (BTW, I’m using MT5 and the Bollinger bands that comes with it produces a three waves, upper , middle, and lower. The middle one is important in this strategy. Yes I know, MT5 sucks… but hey other than you can’t get multiple entry on a pair, it got good features too.)
Time Frame:
15M 30M 1H 4H Daily Month
Rules:
Stick to the plan, no greed or revenge mode.
To keep it simple don’t add any other indicators… why…? Because we will be doing scalping and we are not looking for a trend… Why…? I know, I know, there’s a saying that the trend is your friend but this time who cares about it, we’re doing scalping… why?.. because we will be focusing on reversal movement… why?.. because we’re doing scalping argggggghhhhhh…
Procedures:
-
When to enter?
a) Wait for candles that reaches outside the two Bolinger bands. Think of it that the upper and lower band represents the overbought and oversold. When price action reaches these peaks, there’s a good chance it will reverse back. (Take note, a part of the candle should reach outside the bands).
b) When the next candle reverses and changes color and passes the “close” position body of the previous candle, wait for it to enter back inside the bands. Once it enters back, take that entry position. -
Reward to Risk ratio?
- 2:1 or 1:1, less or more, flexible, Stop Loss and Target Profit will be based on the indicator and also of course, on how much you can afford. Remember, there will be losses, that means you should consider risk management where you can still be able play in on another entries after some lost trade .
- Stop Loss:
- Candle’s wick most outer peak, or just outside of that Bollinger bands.
- Take Profit or Target Profit:
- The target is at whenever the price movement reaches the center of the two middle bands (this is scalping, monitor price action if it reaches the middle of the bands, then take the profit from there). This will somehow lessens the chance of hitting your stop loss on its way to TP, where a fix R&R is sometimes hard to achieve. Just place your TP way above to the other end of the band, but when price reaches the middle band take the profit or close your position from there.
Conclusion:
What to do if you loss a trade?
- Go to the next higher time frame(ex. 30M or 1H), and wait for that next entry position based on that of Bollinger bands, if it appears, go back to the 15M timeframe for a proper entry position. Moving along to the next and next and next higher time frame will help you get out when caught into difficult time of continuous loosing trades. As soon as you see a possible entry on higher frames, go back to 15M and look for the entry in there.
What to do if you win a trade?
- Smile and say “Yehey”, clap your hand, pat yourself on the head and say “Good boy/girl”. Keep patting your head and stick your tongue in and out.
Taking it on the next level, it’s all up to you:
(Do this only after you’re already confident using the strategy)
- Instead of taking profit on the middle, wait it out if it passes the middle. If it does, move the stop loss to trail on the middle of the band and target profit will be at the other side of the peak of the band. Sometimes if it is in range, especially if it is on consolidation after a big price movement, price action will move from peak side to the other peak side of the bands, and if you’re lucky could even leads further and ride along when a big movement appears in again.
- You can even use this strategy to anticipate the next possible big movement after a consolidation stage since you are covering almost every peak reversal on both end side of the band that can happen during ranging stage , it will now be up to you how you would ride along when it happens, this is where the saying the trend is your friend is useful.
!!! The strategy so far works on me and I’m still observing it on my live account using only micro lots, but I cannot guarantee that it would work on you too, it will all depends on how you use it. So test it first yourself on demo, but use it on live at your own risks.
USDCAD 1Hour Chart: (MT5)
EUROUSD 15Minute: (MT5)
Ok, why I did not follow the plan on that last trade? … well, it’s Friday, it’s my last scalping entry for the week … news also says that still no solution for Greece, so it’s still ranging, after that big move down I just thought when the next candle moves back over the body of the previous one it would cause a retracement… and after all of that biting into my shirt and pulling my hair out with both hands, somehow it paid off
So… to avoid shirt biting and hair pulling… stick to the plan.
Happy Trading!!!
- SearchSurf